Yancoal is now looking to newly appointed chief executive and GlencoreXstrata veteran Reinhold Schmidt to drive it towards profitability in an uncertain market.

Schmidt was formerly chief operating officer of Xstrata Coal Queensland – a role that was phased out when the company restructured earlier this year.

He was also executive general manager for the Wandoan project in Queensland, and president of the Colombian coal assets of Glencore.

“The board… believes that he has the background and skills required to deliver on the potential of the Yancoal Group,” the company said in a statement.

Yancoal said the loss was mainly attributable to a net unrealised foreign exchange loss of $492.7 million on the conversion of US dollar denominated debt, resulting from the weakening of the Australian dollar against the US and an impairment of mining tenements amounting to $343 million.

Operating EBIT for the half year ending June 30 was a loss of $109.3 million.

Yancoal’s acting chief executive Peter Barton said: “Yancoal has worked hard to respond to challenging market conditions.

“Prices remain the key driver of the company’s profitability at an operating level; however, our controllable costs are well managed and we continue to make good progress in lowering those costs.”

Onsite unit cash costs are falling on the back of management actions and in particular, through the reduction of contractors and the continuing implementation of the LEAN program.

Major capital projects are undergoing optimisation studies to maximise returns.

The star performer for the company was the Moolarben open cut mine, which increased half yearly production by 19.6% to 2.4Mt.

Looking ahead, the outlook for the coal market remains challenging, the company said.

“Market conditions remain weak overall, with flat demand and continuing oversupply. However, Yancoal will continue to encourage productivity gains and reduce costs across its mining operations,” it said.